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It’s basically feed and seed plus some John Deere equipment manufacturers etc. It has done fairly well and it’s a way to play that sector and there’s nothing wrong with it. It’s been around for quite some time. It wouldn’t be his most preferred choice but it would be something he wouldn’t have an objection to but he wouldn’t be overweighted either.
Not something he is specifically familiar with but there are a number of different based ETFs, theres ZDV-T from BMO, XDV-T from iShares and XEI-T. They all have a little bit of a different focus. Most of them are largely the banks and utilities. You might want to take a look at the weighting of each sectors from ETFs manufacturers website and see which one of those you like.
If he was going to play the emerging market he would certainly choose that one because it’s Vanguard and the cost is going to be very low. He hasn’t been playing very much in the emerging market, because in general the S&P 500 has half of its earnings come from non-U.S. sources so you are actually playing the emerging market already. Since a lot of the global economy seems to be improving, he has taken a look at this, but it’s just that right now he prefers the U.S.
(A Top Pick June 30/17. Up 8%.) That’s a core holdings in all of his portfolio. It’s a little bit more diversified than the XIU-T. He likes both because they both have a liquid options market. From time to time he will buy a Put or sometime he will sell a Call which is quite rare, so he likes the fact that its liquid. These indexes don’t get away from the typical 65-70% of banks, energy, base metals and gold. He would recommend ZIN-T from BMO because it’s industrials rather than being financials and it’s a good complement to the big ones.
(A Top Pick June 30/17. Up 3%.) One of the main attraction is the covered call. It’s an income generating ETF. It’s Europe so you get the dividend as income and covered calls are capital gains. They don’t do full 100% coverage on the underlying assets, they do 50-60% depending upon what they see the market doing.
QQQ-Q vs XLK-N QQQ is NASDAQ, XLK is technology. You’re going to find a lot of overlap. One thing with QQQ is BMO has the Canadian Dollar edged version, the ZQQ-T. Take a look at the website of the ETFs companies and see what weightings are and pick the one you want. Both are excellent. QQQ has some Bio stocks and a whole bunch of other stuff. For a straight technology play he would choose XLK. If you want more diversification go with QQQ.
QQQ-Q vs XLK-N QQQ is NASDAQ, XLK is technology. You’re going to find a lot of overlap. One thing with QQQ is BMO has the Canadian Dollar edged version, the ZQQ-T. Take a look at the website of the ETFs companies and see what weightings are and pick the one you want. Both are excellent. QQQ has some Bio stocks and a whole bunch of other stuff. For a straight technology play he would choose XLK. If you want more diversification go with QQQ.
A good time for an entry position? Another core holding, it’s heavily weighted in the banks, it’s the largest 60 companies in the TSX. It’s something everyone should own in their portfolio. Also worth taking a look at ZIN-T. For some of the smaller investors, you might as well go to your bank and buy their Index Funds. MER are between 0.75 and .90%, no commission. It’s a great way to get into the market for smaller investors and keep the fees low. Make sure you buy into their Canadian Index Fund or their U.S Index Fund, and not into their higher fee mutual funds.
He uses a lot of the ZWB-T. He is always looking at keeping the cost low. When looking at covered calls or managed ETFs, all of a sudden prices spike. He’s looking to buy from 5 to 15 basis points. But there are times when he will look at a different products like ZWB-T or the whole series they have, ZWH-T, ZWA-T, etc. But the different thing with the covered calls is that the persons sitting at the trading desks are actually making a difference and he thinks it’s worth paying for. When you buy a covered call you are giving up some of the upside in exchange for cash flow. With interests rates being so low, covered calls are a good way to get the flow of income. He uses covered calls to enhance the income of a portfolio. He’s been holding this for years.
Leveraged ETFs suitable for day trading? He doesn’t touch leveraged ETFs because at the end of the trading day, there is always ajustement in price and you can be correct on the ETF but still lose money because of the adjustment on the price. He would look at the ones that aren’t leveraged. He would look at the inverse ETFs but not the double inverse ETFs. You can day trade with ETFs, depends if you want leverage. He doesn’t like leverage in general, he wouldn’t take a client that has a home equity line of credit (HELOC) for investing.
How to decide when to sell an ETF if you don’t have a manger? That is some of the risk an individual investor takes. If you are uncomfortable with that, then you should get an advisor. You either got to do it on your own or pay someone to do it for you. There's the robo advisors. He likes the robo advisors. The good thing is that it keeps clients out of the mutual funds hands and opens up an opportunity for them to get a managed portfolio. The problem though is that he has gone to some of the robo advisors and pretended he was someone else and some of the advice he got were quite frankly dreadful. He likes the robo advisors and thinks they have a role to play and they keep the fees low which is great.
